Taking the Brexcuit…

Don’t get hob-nobbled by Brexit – (ginger) snap to attention and pick up these crumbs of advice

© Pixabay: Pezibear

Stuart Farr opens the tin to examine the predicted changes set to occur after Brexit. He finds a selection of broken bits, but is there a crumb of comfort?

The phrase “a week is a long time in politics” was attributed to Harold Wilson (circa 1964) and never a truer word was said.

Fortunately, due to the seemingly endless onslaught of political developments in our Brexit process, I was able to negotiate a decent extension of time with the editors of this esteemed publication in order to submit copy.

At the time of writing, therefore, we are now beyond 29 March. Theresa has lost control to the House of Commons where its occupants are now busily searching their navels for a way out of the current mess.

With only days to go, there is no sight of a solution to the current crisis, notwithstanding the fact that the legal process engaged by Article 50 ticks along relentlessly – rather like a grenade without its safety pin.

Attempting to conjure a useful explanation of the legal consequences flowing from all of this is difficult. It is not helped by the fact that we live in a 24-hour world of news, where stories are constantly regurgitated within increasingly bizarre formats.

So when the politicians, civil servants, and pundits have all disappeared to dinner or the bar, the round-the-clock news feed means that journalists resort to discussing the news between themselves until it all starts afresh (usually, I find, at around 6am with Radio 4’s Today programme).

Taking a leaf out of their book – and realising that by the time you read this at least another week in politics will have passed us by – I took up the challenge of finding out what a colleague in the gun trade was thinking about the whole Brexit process. Here is what unfolded:

Me: Look, erm, the 24-hour news has covered absolutely everything, so shall we just do a quick-fire round comparing Brexit with biscuits?

Trader: Ok. Here goes… Brexit is like a box of broken biscuits you buy from a cheap shop? There’s only a few half-chocolatey ones among a kilogram of stale crumbs. How’s that?

Me: It’s a good start. So, how would you describe the gun trade in all of this?

Trader: Like the yummy filling in a custard cream, sandwiched between a rock and a hard place.

Me: What’s your view of Theresa May’s position?

Trader: She’s like a Rich Tea – admired for its longevity but lacking a majority vote as a brexcuit leader. She’s good for a couple of dunks but you’ll struggle to get a third one out of her before she disappears to the bottom of the mug. 

Me: The government?

Trader: Jammy Dodgers…

Me: Jeremy Corbyn then?

Trader: A Wagon Wheel – a relic of the 70s and always tastes stale. And didn’t they used to be bigger? 

Me: Amber Rudd?

Trader: A Jaffa cake – claims to be a biscuit but breaks all the rules of a biscuit and doesn’t get sacked for it.

Me: Europeans? 

Trader: Garibaldis – nice biscuits; like their hero namesake they support unification; but will soon be scarcely seen in our shops too.

Me: Has Michael Gove adequately addressed the Brexit concern?

Trader: He’s a chocolate finger… but I have no idea why I just said that.

Me: Ahem. Thanks. Now back to the studio…

Unlike a biscuit, there is no way of sugar-coating the problem which looms over us. Two years ago, the prospect of a no-deal Brexit was nervously laughed away. Two years later, from where I sit, the stark reality of a no-deal departure is right beside us.

Prime Minister Theresa May travelled to Belgium to attend EU Council. Upon her arrival she gave a clip to the media.

So what adjustments will need to be made if we leave the EU without a deal? 

It may provide some comfort to know there is a plethora of advice and guidance already out there. The important thing to remember is that the legal position has been stabilised to a great degree already through the harmonisation processes introduced via the Withdrawal Act. The impact on most businesses in day-to-day matters will therefore be reduced considerably.

Our laws will essentially stay the same, and though one cannot ignore the likelihood of some degree of disruption, no one can truly say, hand on heart, how bad it will actually be.

It depends on one’s perspective. If you are an importer of perishable goods, the risk of lorry parks in Kent is potentially significant. If you are in the gun trade, my current expectation is that disruption will, for most, equate to inconvenience rather than catastrophe.

Let’s examine a few areas where the legal profession have been told to expect changes. 

Consumer Law

UK consumers will not see any immediate differences in consumer protection law because UK and EU laws are greatly aligned. The European Small Claims procedure will no longer be made available to consumers in the UK. Additionally, UK consumers will not be able to pursue a claim in the UK small claims court where the retailer is based in an EU/EEA state.

Certain impacts will be mainly procedural. As a case in point, I have recently been advising a UK-based company in a dispute against another company situated in a different EU member state.

With the deadline looming, the prospect of a no deal has inevitably caused angst because of the need to issue legal proceedings in the UK and serve them outside our jurisdiction. In the event of a no deal this may cause difficulties because judgments of the UK courts made against an EU/EEA retailer will no longer be automatically enforceable against the retailer in that country.

Taxation

the most significant changes are likely to occur in relation to VAT as the UK will become a ‘third country’ for EU VAT purposes. However, the UK government will most likely introduce postponed accounting for import VAT on goods brought into the UK. Generally speaking, all goods entering the UK as parcels sent by overseas businesses will be liable for VAT.

Exporters should note that import VAT and customs processes will apply to goods on entry to the EU. UK businesses will still be entitled to claim refunds of VAT from EU members.

However, they will need to use the existing processes for non-EU businesses. This process varies across the EU members therefore check the process in the individual countries before claiming.

Legal and Debt Recovery

EU rules governing the enforceability of UK judgments in EU will cease. This will apply to all unenforced UK judgments.

Ironically, it is likely we will continue to enforce judgments given in other EU/EEA states where the proceedings were initiated before the withdrawal date. England and Wales will fall back on pre-existing common law rules.

Intellectual Property

EU trademarks and community design rights will no longer have effect in the United Kingdom. EU registrars will be entitled to revoke .eu domain names owned by UK companies or individuals and it will not be possible to renew those domain names.

It will no longer be possible to submit an application to the UK customs authorities to request an EU member state to take action with respect to goods suspected of infringing an IP right.

Data Protection

If appropriate, you should review your privacy policies to understand the movements of personal data in and outside of the EU. It is uncertain whether UK businesses relying on consent in processing EU personal data can continue to do so.

If you have an office or agent in another EU country, consider investigating local privacy laws in that country because GDPR allows for local variations. If you process personal data but do not have an office in another EU state, you might have to appoint an EU representative and update privacy notices to include their contact details.

Of course there will be fiscal consequences, but the purpose of my examples is to illustrate that many of the impacts will be procedural rather than quantitative and so it is preparedness which is the key element.

If or when the day finally arrives, we can either present ourselves as an exquisite selection of the best there is to buy or, alternatively, simply become that box of broken bits. That’s just the way the cookie crumbles. 

Stuart is a solicitor and partner at Knights plc. He has been a shooting enthusiast for over 30 years and welcomes contact from trade members:

stuart.farr@knightsplc.com 

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